NZ Dairy Industry Dodges Heavier Hit Under New US Tariff Plan

Highlights:

• New Zealand slapped with a 10% US tariff on primary exports – less than China (34%) and Vietnam (46%).
• Exports to the US totaled NZ$6.5b for the year ending June 2024.
• Open Country Dairy says NZ secured the "best of a bad deal" under new tariff regime.

Tariff Impact Less Severe for New Zealand

New Zealand’s agricultural sector has been spared the harshest blow in the United States' latest tariff hike, with Open Country Dairy Ltd's chief executive labelling the outcome as the “best of a bad deal.” Beginning this week, a 10% tariff will be applied to New Zealand’s primary sector exports to the US — a move significantly more lenient compared to other nations.

At the time of writing, China is facing a 34% tariff, the European Union 20%, and Vietnam the highest at 46%. Despite the added cost, New Zealand’s 10% tariff positions its exporters more favourably on the global stage.

Primary Exports Remain Resilient

According to the Ministry for Primary Industries, New Zealand exported approximately NZ$6.5 billion worth of primary goods to the United States in the year ending June 2024. These include dairy, meat, and horticultural products — key components of New Zealand’s economy.

While the 10% tariff will inevitably add pressure to margins and logistics, industry experts believe the country’s competitive quality and reputation could help cushion the impact.

Open Country Dairy Optimistic Yet Cautious

Open Country Dairy Ltd (ASX: OCD) acknowledged that although the tariff is unwelcome, it is manageable compared to steeper levies placed on global competitors. The company sees an opportunity to maintain market share in the US while other nations may be priced out due to higher tariffs.

Still, the long-term effects of the new trade settings remain uncertain, particularly as global supply chains remain fragile. The government and industry leaders are expected to keep negotiating for better terms while supporting exporters through this transitional period.

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